NEW ORLEANS AS THE MODEL CITY FOR THE 21st CENTURY: New Concepts of Urban Innovation. Metropolitan Policy Program

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1 NEW ORLEANS AS THE MODEL CITY FOR THE 21st CENTURY: New Concepts of Urban Innovation Metropolitan Policy Program at BROOKINGS New Orleans, LA / October 1,

2 1 2 3 A model city for the 21st century is a prosperous, resilient city that embraces the next economy 2

3 1 2 3 Greater New Orleans has made enormous progress but challenges remain 3

4 1 2 3 New Orleans can be a model city if it builds on progress to date and transforms its future 4

5 1 2 3 A model city for the 21st century is a prosperous, resilient city that embraces the next economy 5

6 Prosperity is driven by four assets and good governance Prosperity Productive Inclusive Sustainable Growth Growth Growth Innovation Human Capital Infrastructure Quality Places Good Governance 6

7 The city and its larger regional economy must be resilient... Economic Resilience Total non-farm jobs in the New Orleans Metro 700 thousand 600 Transformative 500 Resilient Non-resilient Sources: Bureau of Labor Statistics and Moody's Economy.com Database (U.S. Bureau of Labor Statistics: CES, QCEW) 7

8 ...and shore up the characteristics that can predict resilience and adaptation to shock Strong and diverse regional economy Large shares of skilled and educated workers Strong social capital Community competence Wealth 8

9 8.4 million jobs lost in the recession 9

10 Unemployment remains stubbornly high Unemployment Rate 10% 7.5% 5% 2.5% August % unemployment 0% Source: Bureau of Labor Statistics 10

11 Domestic We need a consumption new growth will model Not lead economic recovery 11

12 We need a new growth model 12

13 The Next Economy The rebuilt economy must be more export- oriented and less consump7on- oriented; More environmentally- oriented and less fossil- energy- oriented; More bio- and so=ware- engineering- oriented and less financial engineering- oriented; More middle- class- oriented and less oriented to income growth that dispropor7onately favors a very small share of the popula7on. Lawrence Summers Na;onal Economic Council Chairman July 17,

14 The Next Economy EXPORT- ORIENTED LOW CARBON INNOVATION- FUELED OPPORTUNITY- RICH 14

15 Why do exports matter? 15

16 We need to rebalance the U.S. economy 70.1% 61.6% Share of GDP 28.2% 12.7% U.S. OECD Private Consumption Exports Source: Economist Intelligence Unit,

17 Future demand will come from outside of the U.S. Share of World GDP 25.8 % United States 18.2 % BIC Countries Source: International Monetary Fund, World Economic Outlook Database, April

18 Why does low-carbon matter? 18

19 Low carbon economy = Markets 19

20 The energy we use 20

21 The infrastructure we build 21

22 The products we buy 22

23 The buildings we live and work in 23

24 Why does innovation matter? 24

25 U.S. leadership on key innovation indicators is slipping Innovation-Based Competitiveness (2009) 6 th Growth Rate ( ) 36 th Source: ITIF, The Atlantic Century (2009) 25

26 The U.S. ranks low in science and engineering degrees Source: National Science Foundation 26

27 Why does opportunity-rich matter? 27

28 Major exporting industries pay higher wages U.S. Wages Per Exporting Industry 71,084 66,604 59,724 53,720 52,533 45,636 Business, Professional & Technical Services Transportation Equipment Chemicals Machinery Computer & Electronics National Average Source: Third Quarter 2009, BLS, USITC, and BEA 28

29 Jobs in the low carbon economy Financiers Scientists / Engineers Entrepreneurs Laborers 29

30 Poverty has climbed to highest level in decades Percentage of Americans Below Poverty Line Source: American Community Survey; photo courtesy Library of Congress Prints and Photographs Division 30

31 1 2 3 Greater New Orleans has made enormous progress but challenges remain 31

32 The good news: of the five factors that can predict resilience, New Orleans has demonstrated three post-katrina Strong and diverse regional economy Large shares of skilled and educated workers Strong social capital Community competence Wealth 32

33 New Orleans has demonstrated community competence by pursuing systemic reforms Overhaul of the public school system New capacities and holistic approach to neighborhoods Overhaul of healthcare delivery New approach to land use, planning and coastal restoration Sweeping changes in criminal justice 33

34 On wealth, the city and metro area have benefited from vast federal, philanthropic, and private sector investments Federal Dollars $8.8 billion obligated to date from FEMA Public Assistance $13. 4 billion in CDBG disaster funds $15 billion in Army Corps fund for hurricane projects in New Orleans are $5.2 billion in ARRA funds to Louisiana, as of October 2009 Foundation and Corporate Philanthropy Dollars $1 billion in foundation and corporate grants and PRIs to whole Gulf region ( ) 34

35 Greater New Orleans is also beginning to reverse course and show signs of a more diverse, innovative economy Source: Moody's Economy.com Database (U.S. Bureau of Labor Statistics: CES, QCEW) 35

36 Average wages in the metro area grew by nearly 14 percent, accelerating a trend that began in 2000 Source: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce 36

37 Entrepreneurship has spiked in the metro, surpassing the rate of individuals starting businesses nationally *Data for 7 of the 57 Weak City Metros were not available. Source: Federal Reserve Bank of Atlanta analysis of Kauffman Index of Entrepreneurial Activity 37

38 A greater share of students attend public schools that meet state standards of quality Source: Louisiana Department of Education 38

39 The bad news: the largest export sectors of the economy have been shrinking since 1980; only two in top 10 grew post-katrina Source: Moody's Economy.com Database (U.S. Bureau of Labor Statistics: CES, QCEW) 39

40 Greater New Orleans is a low innovation metro Source: Strumsky Patent Application Dataset 40

41 The share of college-educated adults plateaued in New Orleans post-katrina after growing since 1980 n. s.: The difference between 2000 and 2008 is not statistically significant at the 95 percent confidence level for those with a Bachelor s degree or higher in the New Orleans Metro. Source: US Census Bureau, Decennial Census & American Community Survey

42 Income disparities remain stark between whites, blacks, and hispanics n.s.: The difference between the United States and the New Orleans Metro in 2008 is not significant for White (alone, not Hispanic) and Hispanic/Latino (any race). Source: U.S. Census Bureau Decennial Census and American Community Survey

43 While poverty remains high in the city, suburban parishes are now home to the majority of the area s poor Source: U.S. Census Bureau, Decennial Census and American Community Survey

44 Coastal wetlands continue to erode; the impact of the oil spill remains unknown Source: John Barras, Julie Bernier, and Robert Morton, Land area change in coastal Louisiana: A multidecadal perspective (from 1956 to 2006), U.S. Geological Survey Scientific Investigations 019 (2008) data are part of a peer-reviewed, to-be-released report from USGS which will serve as an update to USGS SIM

45 1 2 3 New Orleans can be a model city if it builds on progress to date and transforms its future 45

46 Next Phase: Maintain goal of transformation and prosperity for the long haul 1. Sustain and build on post-katrina reforms to date 2. Make key bets off existing strengths to transition to next economy 3. Strengthen characteristics of regional resilience to minimize impact of future shocks 46

47 Sustain and build on post-katrina reforms to date Increase the pool of qualified teachers by growing skills of native residents Identify sustained funding for the community-based health care centers Target unspent recovery dollars for unmet housing needs, blight reduction, and increased community capacity 47

48 Make key bets off existing strengths to transition to next economy Exports Low Carbon Innovation Opportunity Rich Establish a metropolitan export initiative Modernize port and logistics Tap area s strengths to expand into renewable energy Make the city a model of sustainability Adopt regional innovation clusters Tap network of entrepreneurs Link small minority- and women-owned businesses to new economic opportunities Build skills to match emerging and existing sectors 48

49 Strengthen characteristics of regional resilience to minimize impact of future shocks Continue to nurture open, collaborative society Expand local wealth to match outside resources Diversify economy Increase share of skilled workers 49

50 NEW ORLEANS AS THE MODEL CITY FOR THE 21st CENTURY Metropolitan Policy Program at BROOKINGS New Orleans, LA / October 1,

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